Healthcare providers (e.g., hospitals, physician offices, and the like) provide products and/or services to patients. In many cases, the price is not pre-determined, and a third party must ascertain the price. Some providers will require that the consumer pay or secure funds on an estimate (e.g., estimated patient responsibility) at the point of service. The third party (e.g., estimator, health plan) will calculate the price after the products and/or services are provided, with the understanding that the currency secured via an estimate will need to be adjusted and settled at a later date once the price is finalized (e.g., medical claim is processed by the health plan).
In particular, consumer payments to healthcare providers are moving away from predictable fixed dollar co-payment amounts to unknown percentage-based amounts. This change is due to the shift away from co-pay based health insurance plans to co-insurance based plans, which pay a percentage of the negotiated rate (usually after a deductible). Under these plans, healthcare providers do not know what to charge patients at the time of checkout. Claims need to be processed by the health plan to determine the patients' financial responsibility. Doctors are unable to collect any funds up front and therefore must bill the patient later. These payments become more difficult to collect.
Because the final transaction amount is not known until after the claim has been adjudicated, and since the adjudication process can take a significant amount of time (up to, or even exceeding, ninety days), it is necessary to hold funds for this entire amount of time. Additionally, the final amount is determined by the payer and/or issuer (not the provider or acquirer), further complicating the transaction process.